U.K., U.S. Authorities Talk to RBS About Possible Iran Breaches

U.K. and U.S. authorities are talking to Royal Bank of Scotland Group PLC about the possibility that it breached sanctions on Iran, Dow Jones Newswires reported, citing a person familiar with the matter.

Stefan Wermuth/Reuters

The person cited by Newswires said that RBS, which is 82% owned by U.K. taxpayers, was negotiating with the U.S. Justice Department and the Federal Reserve on whether it complied with sanctions on Iran. The source stressed that RBS initiated the talks.

Two people familiar with the matter told Newswires that the U.K. Financial Services Authority was also talking to RBS.

An RBS spokeswoman pointed Newswires to a disclosure the bank made earlier this month, which she said had first been made 18 months ago.

The disclosure didn’t name Iran, but the source confirmed to Newswires that many of the questions raised in a compliance review related to whether RBS abided by sanctions on Iran.

The probe was earlier reported Tuesday night by the Financial Times (sub req), which claimed, citing a person familiar with the matter, that the investigation has led to the departure of a senior risk manager and internal criticism over control of the bank’s regional compliance units. More coverage is available here and here.

Both the Newswires and FT reports say that RBS is not facing a probe from Benjamin Lawsky, the New York State regulator who settled with Standard Chartered PLC last week, when the firm paid $340 million over Iran transactions.

About Corruption Currents

Corruption Currents, The Wall Street Journal’s corruption blog, digs into the ever-present and ever-changing world of corporate corruption. It is a source of news, analysis and commentary for those who earn a living by finding corruption or by avoiding it. Corruption Currents is written by Christopher. M. Matthews and Sam Rubenfeld and edited by Nick Elliott.

Some posts in Corruption Currents are free but others, denoted by a key symbol, require a subscription.